Under
the Democratic leadership of President Bill Clinton, America’s small businesses
found a real partnership in the United States federal government.The Clinton Administration partnered with
the federal Small Business Administration to leverage the power of America’s
small businesses-America’s entrepreneurs. As a result, small businesses created
75% of 22 million net new jobs created under the Democratic stewardship of the
Clinton Administration.In contrast,
George W. Bush betrays America’s small business community.Rather than fueling our economy by helping
the number one job- creating sector, small businesses, Bush’s first budget
proposed gutting the Small Business Administration by 40%.In 2004, Bush continues betraying America’s
small business owners and employees.As
a result, the Republicans continue to weaken America’s economy because it fails
to fuel America’s small business growth engines.

“I'm here to herald the small businesses which are
the strength of the economy of the United States of America.”

For fiscal year 2002, “Bush …propos[ed] a 40
percent cut in the Small Business Administration's (SBA) budget, eliminating
the New Markets Venture Capital program and ending government subsidies for the
SBA's flagship 7(a) loan program by raising loan fees. The SBA's proposed $539
million budget for fiscal 2002 also calls for the nation's 1,000 Small Business
Development Center locations to begin charging fees for their consultation
services. In addition, the Bush budget eliminates BusinessLINC, a new mentoring
program for small businesses in low-income areas.” [“Bush Eyes Massive Cuts in SBA Budget,” Triangle
Business Journal, March 12, 2001]

"Making it more difficult for small businesses
to get the credit and services they need is flat wrong," says Sen. John
Kerry, D-Mass., the ranking Democrat on the Senate Small Business Committee.[“Bush Eyes Massive Cuts in SBA Budget,” Triangle
Business Journal, March 12, 2001]

[T]he New Market Venture Capital and BusinessLINC programs are
eliminated.…Damon Dozier, director of government affairs for National Small
Business United, fears increased fees for 7(a) loans would make them too
expensive for some small businesses, which "begins to fly in the face of
the purpose of the program."[“Bush
Eyes Massive Cuts in SBA Budget,” Triangle
Business Journal, March 12, 2001]

For
2005, the budget zeroes out subsidy funding for Section 7(a) general business
guaranteed loans, a program run by the SBA. While the budget provides a total
Section 7(a) loan volume of $12.5 billion - a $3 billion increase from 2004 -
it eliminates federal funding and assumes instead that the program will be
funded entirely through a sharp increase in loan fees. This will raise costs
for small businesses.[“Budget in Brief: Bush Budget Cuts
Services for Small Businesses,” House
Budget Committee Democratic Caucus, February 27, 2004]

Background on the 7(a) Program
Changes

“On January 6, when the President’s
fiscal year 2004 budget came up short -- as warned by Congress and the lending
community -- the Administration abruptly and unnecessarily shut down the 7(a)
guaranteed small business loan program. The program reopened on January 14,
2004 with severe restrictions aimed at limiting loan volume. Since then, the
Administration has run the program at a token level with a $750,000 cap on all
loans and elimination of all combination, or so-called “piggyback” loans. This
has greatly disrupted and restricted access to capital for thousands of small
businesses. The Administration has refused requests from Democratic Senators
that it seek additional funding and has also refused to honor loan applications
from as many as 1,500 small businesses, filed before the shutdown for amounts
exceeding the cap, preventing about $600 million in loans from being invested
in local economies. Because of the Administration’s unwillingness to correct
its budget miscalculation and program mismanagement by requesting supplemental
funding for the program or by reprogramming existing funds, the bill relies on
7(a) lenders to carry the additional costs." [Kerry
Responds to SBA’s Legislative Proposals]

[“I]n the
administration's most recent $350 billion tax cut - the cornerstone of their
economic strategy, just 3 percent of it went to small businesses….[T]hey are
set to expire.” - Honorable
Nydia M. Velazquez, (D-NY)

At the time Bush proposed gutting the SBA budget, Republicansproposed“some $25 billion in immediate tax
rebates to large profitable corporations that paid the low-rate ’alternative
minimum tax’ over the past decade and a half because loopholes cut their
regular income tax bills to little or nothing. Some $7.4 billion of these
corporate rebate checks would be made out to just 16 tax-avoiding Fortune 500
companies-each of which would get more than $100 million in rebates. (These
companies reported a total of more than $42 billion in pretax U.S. profits last
year.)”[“House
GOP ‘Stimulus’ Bill Offers 16 Large, Low-Tax Corporations $7.4 Billion in
Instant Tax Rebates,” Citizens
for Tax Justice, October 26, 2001]

16
Corporations with More than $100 Million in AMT Credit Carry-forwards at the

“Bush is proposing to cut this economic engine. Even as big corporations
have begun to make big layoffs, the Bush budget would cripple a small agency
that can help pick up the slack. The nation's 25 million small businesses,
which employ more than half of the private work force, have been responsible for
more than three-quarters of the 22 million jobs created in America since
1992.”

“During the
previous administration, the SBA was considered an important vehicle for
bolstering the initiative and drive of entrepreneurs. Over the past eight
years, the SBA's guaranteed loan program nearly doubled. It was able to provide
guarantees for more of the loans that banks are reluctant to make - long-term
loans to fledgling businesses, providing longer loan maturities and lower
monthly payments. During that time the agency nearly quadrupled loans to
minorities and tripled the number of loans it backed for businesses run by
women. We also doubled the number of women's business centers across America -
increasing the flow of capital as well as the information that helps people
succeed. Women are now launching businesses at twice the national rate.”

“There are
also the small business bills that went NOWHERE…. Among the dozens of small
business bills that saw no action [in 2003], the one that, perhaps, mattered
the most, was the reauthorization of the SBA. This bipartisan bill passed out
of the House Small Business Committee unanimously. It modernized
and streamlined SBA's programs. But the
administration and Republicans stonewalled it. And who loses the most? This
nation's 23 million small businesses. This
inaction has led us to where we are today. Almost 9 million Americans are out
of work.What
these people need are jobs - and small businesses can provide them. Small
businesses are the surefire way to get our economy back on track - for good.”

"’Combined
with the President's fiscal year 2005 budget, these are the most anti-small
business proposals we've seen in four years,’ Kerry said. ’This Administration
likes to talk about the importance of small business, but these proposals are
completely at odds with their rhetoric.’”[“Kerry
Responds to SBA’s Legislative Proposals,” Press
Release, April 21, 2004]

In October
2003, U.S. Senator John Kerry “successfully fought to include in the JOBS Act
[an] increase[in] venture capital investment in small businesses by exempting
debenture Small Business Investment Companies (SBICs) from the unrelated
business taxable income (UBTI) rules, which will allow them to gain greater
access to institutional investors. In a letter to the Finance Committee,
Senator Kerry requested the UBTI exemption be included in the JOBS Act as a
means of increasing investment in the small business and manufacturing sectors.
Senator Olympia J. Snowe (R-Maine), Chair of the Committee on Small Business
and Entrepreneurship, also signed the letter.”[Kerry
Provisions Boost U.S. Manufacturing, Increase Job Growth, Spur Small Business
Investment,” Press
Statement, October 2, 2003]

"This will create jobs by increasing venture
capital investments that fuel high-growth small businesses, which are among the
nation's best job creators.SBICs that
are funded through debentures will now be able to attract more institutional
investors and provide financing to more cutting-edge small businesses and small
manufacturers."

The
Republican majority blocked a Snowe-Kerry amendment that would have secured the
most experienced women’s business centers in 39 states. Without this amendment,
53 centers are at jeopardy of losing their funding. “’Women-owned firms are
constantly breaking down the barriers of our past and proving that the business
world is no longer a good ol’ boy network,’ Kerry said. ’Our amendment would
have prevented the Administration from depriving women entrepreneurs of the
help they need to grow and create jobs. . . Last year alone, the WBC network
helped 106,000 women in business,’ Kerry said. ’Today, with women-owned firms
opening at one-and-a-half times the rate of all privately held companies, the
demand and need for women’s business centers is even greater. Funding is not
only important to the centers themselves, but to the women’s business community
at-large and to the millions of workers employed by women-owned businesses
around the country.’”[“Kerry
Responds to SBA’s Legislative Proposals,” Press
Release, April 21, 2004]

“Kerry called
for giving small business tax credits of up to 50 percent to help them provide
coverage for low- to moderate-income employees. He also proposed having the
federal government help small businesses cover the costs of catastrophic
medical care, which he said would save a family as much as $1,000 each year.
’It's a free-for-all right now,’ Kerry said. ’We have to give our small
businesses and their employees the help they need.’"[“Kerry Wants Health Care Reform for Small
Businesses,” Associated
Press/ Fox News, May 12, 2004]

“As the former Chairman and current
Ranking Member of the Senate Small Business and Entrepreneurship Committee,
John Kerry has been a national leader in promoting small businesses growth.
Kerry owned his own small business, a cookie and muffin shop - Kilvert and
Forbes - that he opened in 1976 with a friend in Boston’s Quincy Market giving
him firsthand experience of the obstacles faced by small business owners.
As President, John Kerry will bring the lessons of owning and working in a
small business and his leadership fighting to support small businesses in the
Senate to the White House.”[New ‘Era of Opportunity’ for
Small Business in America]

Investing in small business
is good “bang for the buck”. For example, an additional $170 million investment
could make $28 billion available in long-term capital and equity for small
businesses, creating 850,000 jobs annually. John Kerry will ensure small
businesses have all the federal support they need to grow and thrive by:

Helping
Micro-Enterprises: About 60% of new businesses in
New Hampshire are micro-enterprises, defined as operations with five or
fewer employees and revenues under $500,000. John Kerry will expand loans
and equity for these smallest businesses.

Accessing
Capital: Venture capital funding has dramatically
declined - from $26 billion to $5 billion - leaving many businesses with
no equity financing. John
Kerry will bridge the gap between entrepreneurs’ need for capital and
traditional financing sources by increasing the federal government’s
venture capital investments.

Increasing
Loans: Financing that’s affordable and easy to
obtain is often difficult for small businesses to find. President
Bush has consistently shortchanged funding loan programs. One of Bush’s
proposals translates into the loss of almost 200,000 American small
business jobs. John Kerry will expand loan programs to help more small
businesses get off the ground.

The
federal government is the largest buyer of goods and services in the world.
Small businesses are often denied access to the federal marketplace.

Restrict
Contract Bundling: The practice of contract
“bundling,” which turns small contracts into big ones that small
businesses have a harder time competing for, has undermined contracts for
small businesses. President Bush pledged to end contract
consolidation, but he has not. In October 2003, the Office of
Management and Budget issued a report showing the number and size of
bundled contracts is at a 10-year high. John Kerry will provide small
businesses with more opportunities for government contracting and
opportunities to work with federal agencies - including the Department of
Defense, the Department of Homeland Security, and the Department of Health
and Human Services.This will
reduce contract bundling.

Increase Number of Federal Contracts: Total federal contracts have increased 7% under
President Bush, but the small business share of these contracts has
decreased 14%. John Kerry will increase the number of federal contracts to
small business by increasing the government-wide goal for small business’s
share of federal contracts to 30%.

Tax
Simplification For Small Business: America’s small businesses are drowning in tax paperwork. The
nation’s employers are responsible for filing federal and state employment
taxes and wage reports, as well as unemployment insurance reports. Just to
keep up with these requirements, employers must maintain separate wage
records for federal and state income tax withholding, FICA, FUTA, and SUI.
In many cases, employers must report this information to government
agencies at different times and in different forms. These burdens are
compounded when employers do business in more than one state as states may
differ in legal or procedural requirements. John Kerry will reduce
this burden by simplifying tax filing for small businesses including
allowing the IRS and state agencies to combine, on one form, both state
and federal employment tax returns.

·Tax Credits To Reduce Energy
Costs: America’s small businesses account for more than half of all
energy consumption in North America. The growth and development of small
businesses depends on an affordable and reliable energy supply. Increasing
energy prices hurts small businesses already struggling in this economy. To
help small business owners reduce their utility bills, John Kerry will provide
a credit to purchase equipment meeting energy-efficiency standards for heating
and cooling in new buildings or to retrofit existing buildings. He also will
provide a 20% tax credit for the purchase of energy efficient building
equipment, including electric heat pumps, hot water heaters, and natural gas
heat pumps.

·Tax Credits For “Called-Up”
Reservists: With so many reservists serving in Iraq, John Kerry believes we
need to provide support to small businesses whose reservists are called up for
active duty. He will provide up to $12,000 in tax credits tofirms with 50 or fewer employees that have
“called-up” reservists. Half of the money can be used to cover the reservist's
salary, and the other half can be used to help hire and train temporary
replacements. Kerry will provide up to $20,000 in tax breaks to small
manufacturing companies with fewer than 100 employees to split between support
for the reservists’ salary and finding temporary replacements.

During the last three years,
2.7 million (one in every seven) manufacturing jobs have been lost
nationwide. Both large and small companies have been hurt. To help
strengthen America’s small manufacturers John Kerry will: increase loan and
investment limits; develop a three-tier manufacturing skills training program
for current workers, college, and high school students; increase funding for
the Manufacturing Extension Partnership Program; and, create an Office of
Manufacturing at the Small Business Administration.

Over the past two years, the
number of small business closures has been greater than the number started,
which is not surprising considering President Bush’s business agenda largely
benefits big corporations and cuts programs supporting small businesses.
In a Kerry Administration, small businesses will have the support they need and
deserve to grow and be strong. Kerry will give small business a cabinet level
position; a voice at the World Trade Organization to ensure that small
businesses are considered in trade issues; and, federal regulations fair to
small businesses.

Health
Care at One-Third the Cost for Small Businesses:
Health care costs are rising about 15% this year for small businesses and
often as high as 25%. Only 62% of businesses employing 10 to 49 people
offered an employee health plan in 2002 compared to 99% of large
firms. Small businesses typically spend more on administrative
costs, and premiums often rise when one employee has high health care
costs. John Kerry proposes refundable tax credits up to 50% of the cost of
coverage to small businesses and their employees. Also, giving small businesses
access to the Congressional Health Plan will save small businesses
approximately 15% in health care costs on top of the tax credit -health
care will be two-thirds cheaper for small business employees than it is
today.

·A New ‘Small Business
Retirement Initiative’ to Help Small Businesses Offer Savings Plans: The biggest impediment for a small business to start a pension
plan is start up costs. In fact, setting up a small business pension plan can
cost as much as $20,000. Also, as pensions become complex, businesses must
contract with resources to help manage them. John Kerry supports tax credits to
help offset the start up costs of small businesses. He also supports a pension
pooling fund to help pool administrative costs of setting up pensions and savings
plans for small businesses.

Fewer Small Businesses Can
Afford Health Care: Health care costs are rising about 15 percent this year for
those small businesses and often as high as 25 percent. Just 62 percent of
businesses employing 10 to 49 people offered a health plan in 2002 whereas
about 99 percent of large firms did.

·A More Affordable
Health Plan: Small businesses typically spend more on
administrative costs and often see premiums rise when one employee has high
health care costs. John Kerry will allow small businesses to join the new
Congressional Health Plan and small businesses will be able to provide obtain a
better deal for health care.

·Tax Credits to Make
Healthcare 65% Cheaper: John Kerry proposes refundable tax credits up
to 50% the cost of coverage to small businesses and their employees.
Additionally, giving small businesses access to the Congressional Health Plan
will save small businesses approximately 15% in health care costs-health care
can be 65% cheaper for small business employees than it is today.

As the former
Chairman and current Ranking Member of the Senate Small Business and
Entrepreneurship Committee, John Kerry has been a national leader in promoting
small businesses growth. Kerry owned his own small business, a cookie and
muffin shop - Kilvert and Forbes - that he opened in 1976 with a friend in
Boston’s Quincy Market giving him firsthand experience of the obstacles faced
by small business owners. As President, John Kerry will combine the
lessons of being a small business owner with his senatorial political
leadership to support small businesses when he’s in the White House. [New ‘Era of
Opportunity’ for Small Business in America]

Kerry’s
White House Will Be “Small Business
Friendly” -- John Kerry “favors expansion of small-business loans and
federal support for R&D, especially research for energy independence.” [Kiplinger
Letter, June 27, 2003]

·Kerry Focusing on Tax Breaks
& Health Care for Small Businesses:“As the ranking member of the Senate
Committee on Small Business and Entrepreneurship, Massachusetts Senator John
Kerry might be expected to propose a plan that emphasizes the role of small
business. In March he introduced a small business stimulus act that, if passed,
would speed up depreciation schedules on high-tech equipment and provide tax
breaks to sole proprietorships. Even his health-care plan has a sop to small businesses, in the form
of tax credits to make coverage more affordable.” [Fortune
Small Business, June 20, 2003]

·John Kerry is Making “Small
Business Tax Cuts a Key Part of His Platform”:“John Kerry, the first Democrat to toss
his hat into the 2004 presidential ring, has made small-business tax cuts a key
part of his platform.”[Investor's
Business Daily, December 17, 2002]

·“Kerry
Seeks to Increase Small Business Contracting”:John Kerry, “chairman of the Senate
Small Business and Entrepreneurship Committee, introduced legislation that
would increase the federal government's procurement goal for small businesses
from 23 percent of all prime contracts to 30 percent by fiscal 2006. Kerry's
bill, called the Small and Disadvantaged Business Ombudsman Act, also calls for
the Small Business Administration to appoint an ombudsman to investigate the
complaints of small business owners who feel they are being treated unfairly by
government procurement officers or prime contractors. Small business owners who
fear retaliation would be guaranteed confidentiality.” [Washington
Business Journal, June 22, 2002]

·John Kerry is “Prepared to
Tackle” Small Business Issues:John
Kerry “is prepared to tackle a number of issues, among them energy and
environmental regulations impacting entrepreneurial firms. ‘Right out of the
gate, I’ll hold a hearing on the relationship of small businesses to
environmental regulation to diffuse the mystery about it and to try to figure
out where big-company rules-when applied to small entities-don’t fit’…Kerry
says his chairmanship will be marked by bipartisan consensus…"The truth
is, when I talk to small-business owners, I hear as much about energy, health
care, taxes, the environment and regulations as I do from the owners of large
businesses or their employees,’ he says. "The only difference is that
these issues hit small businesses even harder. That’s why we need to carefully,
thoughtfully and responsibly find answers that make sense for small firms.” [Entrepreneur.com,
June 26, 2001]

·Kerry Brings New Focus for “Women
Owned, Minority Owned” & “New Markets” -
"’In the last few years, the [Small Business] committee has focused very
much on agency oversight and regulatory reform,’ says Doris Freedman, policy
director for the National Commission on Entrepreneurship.‘ "Under Kerry,
they'll look more at what the SBA can do to marry the interests of high-tech
companies and small businesses.’ SBA programs that target aid to women- and
minority-owned businesses, as well as those in inner-city and rural areas, will
probably get more support from Kerry than they would have received from Bond.
The New Markets Initiative, in particular, is expected to gain another lease on
life now that Kerry is chair. Signed into law by President Clinton in his last
days in office, the initiative was supposed to channel money to inner-city
businesses through specially-accredited investment companies. The initiative
was eliminated in the Bush Administration's first budget proposal…[and] Kerry
is expected to fight for it.”[Business
Week Online, May 29, 2001]

“My plan is the most sweeping international tax law
reform in forty years. We’ll replace tax incentives to take jobs offshore
with new incentives for job creation on our own shores,” said Kerry.
“Today, if a company is torn between creating jobs here or overseas, we now
have a tax code that tells you to go overseas. When I am President, it
will end.We’ll also give companies a
tax break to create and keep jobs here at home. And that especially means
supporting the small businesses that create so many of the jobs we have here at
home.”